By Oyinkansayo Wole-Bodunde.
The recent interim financial results of MultiChoice Group, a leading pay television company, have sparked a mix of reactions.
The results revealed a significant loss of 243,000 subscribers on its DStv and GOtv services in Nigeria, one of its key markets, within the six months covered by the report.
Additionally, the company reported a loss of 298,000 subscribers in Zambia, attributed to persistent power outages caused by drought.
While some analysts have attributed the decline in subscribers to the increasing popularity of streaming services like Netflix and Prime, and MultiChoice’s alleged failure to diversify, a closer examination of the results reveals a more nuanced picture.
MultiChoice’s subscription video-on-demand (SVOD) service platform, Showmax, has reported a 50% year-on-year growth and a 30% increase in paying subscribers, thanks to its transition to the Peacock technology stack and partnerships with major distributors.
Furthermore, the tariffs of streaming services have also been affected by local economic conditions. Netflix, for example, has increased the tariff of its premium package to N7,000 from N4,000 monthly. The results also show that MultiChoice has been proactive in adapting to the current economic realities and industry changes.
As Calvo Mawela, CEO of MultiChoice Group, stated, “We are proactive in our focus to right-size the business for the current economic realities and industry changes. We have successfully been implementing our strategy over the past few years, achieving key milestones such as our investment in KingMakers [MultiChoice’s gaming division].”
The company is also expanding into the insurance and financial services sectors through a partnership with Sanlam, which is expected to generate an accounting gain of between $144.4 million and $182.9 million. Its fintech venture, Moment, is experiencing significant growth, processing nearly 30% of MultiChoice’s total payments, with payment volumes of $242 million across 40 African countries since its launch.
In the gaming industry, BetKing Nigeria has risen to the second position in the online betting sector, despite a 48% revenue decrease in the industry. Irdeto, MultiChoice’s global technology division, is also making significant contributions through the expansion of its digital security services to address the increasing demands of online and streaming platforms.
The current economic conditions in Nigeria, particularly the soaring inflation rate of 33.88%, have forced consumers to reduce their spending on non-essential items, including pay television services. As a result, consumer behavior has shifted significantly, leading to a decline in subscribers for MultiChoice. However, the company’s diversification efforts and proactive approach to adapting to the current economic realities position it for future growth.
